Soon to be prime minister, former Pakistan cricketer Imran Khan will be challenged to address the country’s current economic woes, which some have predicted may increase cryptocurrency usage.
An economic crisis is predicted in Pakistan on the eve of a major shift in the political landscape. The Pakistani rupee has depreciated 15 percent against the US dollar in recent months and the country’s net international reserves are now in negative figures. Meanwhile, the demand for dollars for imports exceeds Pakistan’s capacity to earn them through exports.
Amongst this turbulent financial climate, according to Forbes, LocalBitcoins trading volumes are on the increase which is reportedly a reflection of the cryptocurrency markets on the whole in Pakistan, partly fuelled by economic uncertainty and a increased confidence in Bitcoin.
Although Khan’s position is all but sealed, Gareth Leather, the senior Asia economist at Capital Economics suggests it matters very little who actually takes the reigns:
“Whichever party wins Pakistan’s upcoming general election will take over an economy on the brink of a balance of payments crisis. Growth is likely to slow sharply regardless of who wins Wednesday’s election.”
The fact that Pakistan’s Central Bank is curbing access for many Pakistani citizens to US dollars and pressuring fiat currencies means that over time cryptocurrencies will appear more attractive in the way that they have in many other countries with failing economies, such as Venezuela.
One of Pakistan’s first privately generated cryptocurrencies was Pakcoin which has been accepted as a mode of payment in various institutions since its conception over two years ago. In fact, it is said to be the first digital currency accepted by any Asian hospital. Ten retailers now use it in the country so that their customers can pay for goods and services using crypto.
To date, Pakistan has warned banks against ICO’s and cryptocurrencies in general with a statement to that effect in April of this year.
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